Solar power vital for China, US economically, too: report

China and the United States should work together to scale up solar power not only to counter climate change, but for their economic interests, according to a report released on Tuesday.

The report, The New Solar System, describes China's evolving solar industry and its implications for competitive solar power in the US and the world. It is a result of two-year study by the Steyer-Taylor Center for Energy Policy and Finance at Stanford University.

"We're going to figure out a way for our two countries and the companies in each of our countries to work together more - less of a battle, more collaboration" to have the economic, security and environmental benefits of rapidly expanding the deployment of solar to its maximum potential, said Dan Reicher, executive director of the center and one of the report's authors.

He said the US should embrace the reality of a globalizing solar industry and include China in international solar research and development efforts.

According to the report, China, more than any other player, is driving the global rise of solar power.

China produced 71 percent of the world's solar modules in 2016, IHS Markit estimates. It's also the leading producer of solar-power equipment and deployer of solar energy.

Jeffrey Ball, primary author of the report and scholar-in-residence at Stanford, cited the Yangtze River Delta, which comprises Shanghai, southern Jiangsu province and northern Zhejiang province.

The area is now the solar center of the world, responsible for 60 percent of solar- module production in the world.

The report also states that China is rapidly and significantly improving its solar research and development, and in certain key areas, it now leads the world.

Coal currently provides 73 percent of China's electricity, while solar provides 1 percent.

But by 2040, coal production will drop to 43 percent while solar increases to 6 percent, Ball said, citing the International Energy Agency (IEA).

The IEA also projects that solar photovoltaic power will account for 16 percent of the world's electricity production by 2050.

Last October, IEA announced two firsts in 2015: More than half of all the power capacity that was added globally in 2015 came from renewable sources, and the cumulative amount of installed global electrical-generating capacity from all renewables - hydropower, wind, solar, geothermal and other sources - surpassed that from coal.

With the renewable-energy trends going on, it is crucial to put this growth of solar and other renewables into perspective, the report suggests.

"We are witnessing the start pretty clearly of a significant diversification of this industry," said Ball, "a pretty profound change in China, and that is a diversification geographically of where Chinese solar companies make their stuff."

Beyond China, Chinese companies manufactured solar goods in countries including Malaysia, Singapore, South Korea, and the US.

"If you fly to San Francisco, you will notice that most large Chinese companies have offices largely because they are building solar projects in the United States. This is a diversification triumph in the Chinese history," Ball said.

Other advice the report came up with from studying the solar industry in China is to cut the costs of solar power and to focus US federal support for solar primarily on research and development (R&D) and only secondarily on manufacturing.

Yuan Yuan in Washington contributed to this story.